State says no to turbine funds; Selectmen to recommend borrowing $14 million to decommission turbines
The headline should read ‘State does not support the Town of Falmouth,'” Chairman of the Falmouth Board of Selectmen Kevin E. Murphy said last night following a joint meeting with his board and the finance committee at Falmouth Town Hall.
The session was held to provide clarification to Town Meeting members about the board and finance committee’s recommendations for three articles on the Special Town Meeting warrant related to the wind turbines and what financial assistance, if any, the state would provide Falmouth in dismantling the turbines.
Although selectmen and the finance committee were able to come to an agreement on how they want Town Meeting to vote on Articles 21 through 23 on the Special Town Meeting warrant, there was little discussion on two letters sent to the town by the Massachusetts Clean Energy Center and the Massachusetts Water Pollution Abatement Trust on what level of support they would provide Falmouth as it attempts to navigate its way out of the headache caused by the wind turbines at the Wastewater Treatment Facility.
Since January the selectmen’s solution to that headache has been to push for taking down the turbines with the goal of appeasing neighbors living in the vicinity of the machines who have complained they have been impacting their quality of life shortly after the first became operational in the spring of 2010.
On Tuesday the board of directors of the Clean Energy Center met to discus the town’s request that the state agency forgive Falmouth the $1 million it gave the town for Renewable Energy Certificates (RECs), representing energy expected to be generated by Wind 1 between 2015 and 2029.
The board of directors voted to establish a three-person subcommittee that will review any potential modifications to that REC agreement. The subcommittee will be guided by a set of principles that includes “the action taken by the town with respect to the turbines must not run counter to the general ratepayers of MassCEC’s Renewable Energy Trust.”
Additionally, the letter states that Falmouth would not receive a waiver for the RECs “for a town action involving decommissioning and/or removal of the Wind 1 turbine.”
The Water Pollution Abatement Trust’s letter, sent yesterday to Town Manager Julian M. Suso, focuses on Wind 2 and whether Falmouth would have to repay $4.85 million in stimulus money it received to construct the machine. “In the event that the project ceases to function as an energy efficient project, the Trust will amend Schedule C to reinstate the Town’s obligation to pay principal and interest on the Loan and take such other actions as it deems necessary…,” Susan E. Perez, executive director of the abatement trust, wrote.
“I think it is clearly evident that with the state’s clean energy initiatives the folks in Falmouth are being held hostage,” Mr. Murphy said of the state’s response to the town’s request for help.
Although he was disappointed with the state’s lack of support, he said, the town will continue to reach out to it for support as the process for dismantling the turbine unfolds.
The next step will take place on Tuesday when Special Town Meeting considers the three articles related to wind turbines on the warrant. With the first of those, Article 21, both selectmen and the finance committee voted to recommend indefinite postponement as all actions concerning the dismantling of the wind turbines are now addressed in Article 22.
With Article 22 Assistant Town Manager Heather B. Harper walked selectmen and the finance committee through two options, the first of which would require a two-thirds vote of Town Meeting because it would require authorization to borrow $13.98 million to take down the turbines. If approved at Town Meeting, it would then go to voters at the ballot in May.
The other option Ms. Harper provided was to seek a $100,000 appropriation from free cash to cover the cost of funding a Request For Proposals to dismantle both wind turbines. This would have only required a majority vote of Town Meeting because it was not excluding any debt. But even under this scenario selectmen would seek to place a question on the ballot asking whether voters supported the removal of the turbines without authorizing borrowing.
If that question passed, then Town Meeting would be asked in November to support an article to appropriate funds to take down the turbines. That article would then require a two-thirds vote.
In looking at the two options, finance committee member Nicholas S. Lowell said, “either way it is a two-thirds vote [of Town Meeting]. We have to decide to do it now or later.”
The only advantage to waiting, Mr. Murphy said, is that Falmouth would know whether the turbines have any resale value and it would be able to work on persuading state representatives to support special legislation allowing the town to borrow money to remove an asset.
Under state law Ms. Harper said the town can only borrow money to build or protect an asset, noting that “you can’t take out a mortgage to take down a house.”
Because Falmouth would be borrowing money for such an unusual project, she said, the interest rates on its loan could potentially be higher. “It will have an impact on the overall long-term costs,” she said.
Finance committee member Gardner L. Lewis asked what Falmouth would do if Boston rejects the town’s request for special legislation allowing it to borrow money to take down the turbines. “What happens if God says no?” he wondered.
“It is not God in Boston,” Mr. Murphy replied. “It is the house and the senate… I hope we’d be able to talk to our elected officials on a basic level. It is not a done deal.”
Selectman Mary (Pat) Flynn pushed the board to recommend Town Meeting support the borrowing of $13.98 million now rather than wait until November.
“I think the two-thirds motion is more clear and more direct,” Selectman Douglas H. Jones said in agreement, a sentiment shared by his colleagues on the board, who voted 4-0 to recommend this course of action to Town Meeting. Selectman Brent V.W. Putnam did not attend last night’s meeting.
“If Article 22 goes down, what happens?” finance committee chairman Judith P. Magnani asked.
Mr. Murphy did give an indication that if Town Meeting does not authorize the town to borrow $13.98 million to take down the turbines, the board will make a motion to reconsider the article seeking $100,000 to pay for a Request For Proposals.
And even if that fails “the board is resolved that we put this on the ballot,” Mr. Murphy said, later noting that selectmen will be meeting next Thursday at 6 PM in order to place a question related to the dismantling of the wind turbines on the May ballot.
The finance committee ultimately sided with selectmen with only Mr. Lewis abstaining from the vote. He said he wanted more time for the committee to make a decision. In response, Mr. Murphy said he had wanted selectmen and the finance committee to take a stance on the wind turbine articles last night so Town Meeting members would be able to digest that information before next week. “Very often the moderator is concerned we give them recommendations on Town Meeting floor,” Mr. Murphy said. “This is an unprecedented issue in this community… I can honestly say as I am one of the stingiest guys when it comes to money and the most conservative, sometimes you have to take a step back to take two steps forward.”
With the town facing additional challenges in the future, from water to wastewater, Mr. Murphy said, it is important these two boards show the community they can work together. “We may meet the needs of this segment of the population who someday will help meet the needs of another segment of our population,” he said.
EXPLANATION: This article will allow the Town to seek special legislation required to borrow for the costs associated with the dis- mantling of Wind I and Wind II. The sum re- quested shall not exceed the appropriation which represents the $3,404,808 estimated to shut down, remove and restore the site, includ- ing the direct costs to procure, permit, disman- tle and remove both turbines, legal, technical and consulting expenses and the refund value of Renewable Energy Certificates owed to the Massachusetts Clean Energy Center. In addi- tion, this sum includes the principal due on an outstanding note in the amount of $4,865,000 borrowed to construct Wind II. The authoriza- tion to borrow is subject to special legislation and affirmative vote at the ballot to exclude the amounts owed from the limitations of Proposi- tion 2 1/2. An affirmative vote at the ballot is also required to exclude existing debt incurred for Wind I which has an additional remaining principal balance of $5,717,862 for a total esti- mated obligation to remove Wind I and Wind II of $13,987,670.
MOTION: That a sum of $8,269,808 is appropriated to pay costs of decomissioning, dismantling and removing Wind 1 and Wind 2, repaying obligations due on account of such wind turbines, and that to meet this appropriation, the Treasurer with the approval of the Selectmen is authorized to borrow said amount under and pursuant to the passage of special legislation contained in this motion, and to issue bonds or notes therefore. No sum shall be borrowed or expended hereunder unless and until the Town shall have voted to exclude the amounts required to repay any borrowing authorized by this vote, or any previously incurred on Wind I, from the limits of chapter 59, section 21C of the General Laws (also known as Proposition 2 1/2).
And further the Board of Selectmen is authorized to submit a petition to the Legislature for enactment of special legislation as follows and that the Board of Selectmen is authorized to accept recommended changes by Legislative, Counsel or Bond Counsel to further effectuate the purposes in this article…
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